A new law that would allow company directors with a track record of non-compliance be made personally liable for PRSI contributions not paid over to the State, is among the recommendations of the latest report from the Dáil Public Accounts Committee.
The measure would be comparable to the regime that exists in the UK and which has been found to work as a deterrent there, committee member Jim O’Keeffe told a press conference in Leinster House today.
Committee chairman Bernard Allen said the committee hoped the “conservative” suggestion would be introduced into law.
Committee member Roisín Shortall said the Department of Enterprise, Trade and Employment had opposed the measure when the committee was examining the issue, and had argued that it might act as a disincentive to foreign direct investment.
However she said in the US companies had to put public monies such as PRSI contributions into dedicated accounts and could not use them for cash flow reasons.
Asked why the committee was only recommending that the measure apply to PRSI, and not to income tax and VAT, she said the recommendation was “a start”.
The committee has also recommended that company directors should have to have a tax clearance certificate when setting up new limited liability companies or when being appointed to a limited liability company.
It has also recommended that the Company Law Review Group should examine whether a minimum capitalisation level for new companies of between €5,000 to €10,000 should be introduced “given the privileges that are conferred on companies through the availability of limited liability status”.
According to the report the Revenue Commissioners wrote off €1 billion in fiduciary taxes - principally PAYE and PRSI - in the past ten years. In 2009, a total of €202.9 million of this tax was written off. This figure is expected to increase this year owing to the rise in number companies going out of business.